US economic growth slows to 2.3% in 2024

The US economy’s growth rate slowed in the second reading for Q4 2024, in line with expectations, as investments and exports contracted.

Official data released today, Feb. 27, showed that the gross domestic product (GDP) - measured in real prices - rose at an annualized rate of 2.3% in the fourth quarter of 2024, compared to 3.1% in Q3 2024.

This data is in line with the preliminary reading released in January, and analysts' expectations. The slower pace of growth was due to a contraction in exports and investments, partially offset by an acceleration in consumer spending and lower imports.

For 2024, the US economic growth remained unchanged from the previous reading at 2.8%, compared to 2.9% in 2023.

The Bureau of Economic Analysis revised the personal consumer price index up 0.1% to 2.4% year-on-year (YoY) last quarter, while accelerating from 1.5% in the third quarter.

Its core counterpart, which excludes food and energy prices - the Federal Reserve’s preferred gauge of inflation - was also revised up 0.2% to 2.7%, from 2.2% in Q3 2024.

The data suggested that the US economy may lose momentum in 2025, despite the continued acceleration of inflation.

This raised concerns about the Fed's ability to steer the world's largest economy into a soft landing, especially amid forecasts that policymakers will slow the pace of interest rate cuts this year.